Change Management and Informal Networks: What Business Leaders Need to Know

Emma Mulder

For as long as business has existed, we have had to deal with organizational change. It’s natural for any enterprise to grow and expand in times of prosperity, and this expansion requires re-organization, shifting of responsibilities, a search for new efficiencies, and more. Likewise, many businesses are forced to contract at times, and this process also entails many changes.

The need for a formalized approach to change was realized in the 1960s when grief counselors discovered that work-related changes can have a deep and lasting emotional impact on employees. Based on this early research into the nature of change, sociologist Everett Rogers proposed that organizational change must be understood in the context of people and relationships. He coined the term “early adopters” to describe how some people respond to change and innovation. In the 1980s, the first formal change management models came into being, and today change management is a formally recognized academic discipline.

The Power of Influence

Many traditional organizations look at their org chart, believing that their most influential team members are at the top of the pyramid. In most cases, nothing could be further from the truth. In fact, many studies show that informal influence, rather than formal power, has the strongest effect on change adoption and innovation. Interestingly, the reverse may also be true: employees who are early adopters are likely to increase their sphere of influence.

Today, the virtual nature and global scale of working relationships has made us much more aware of informal influence. Technology is created to support the collaboration of virtual and remote teams, enabling innovative problem-solving. Working styles have evolved, and power is shifting further down the organization, flattening organizational charts.

Virtual and remote workplaces, however, pose special challenges in change management, as they make it more difficult to create and maintain traditional employee engagement. Face to face interactions build relationships, rapport, and trust, and establish informal networks that influence how well a team or an organization adapts to change.

The Role of Informal Networks in Change Management

A network approach can help organizations to make lasting change by working through influential employees and focusing on points in the network where relationships exist. It also helps to measure the effectiveness of change initiatives.

Because successful change management requires the management of people and relationships, it involves more than simply building a project plan, securing the right buy-in from leadership, and then altering operational functions. Placing stakeholders in cross-functional teams based only on their expertise is not always effective, as they might not have the appropriate working style or level of influence. Successful change management requires identifying stakeholders who have the right:

  • knowledge
  • energy
  • connections
  • influence

to help manage the impact of change. Placing those stakeholders in the right position from the start helps to ensure that understanding and trust are built and maintained as changes are implemented.

How to Leverage Informal Networks to Manage Change

If an organization is willing to invest time and resources into understanding their informal networks, they will greatly improve their chances of making successful organizational changes. There are three key actions companies should take:

  1. Analyze informal networks: Every organization has its formal structures; traditional organizational charts do not, however, represent how work is actually performed and the interactions between individuals and teams. Network Centrality® explores the patterns of communication, collaboration, and trust between individuals and teams. It looks holistically at the entire organization, instead of focusing on individual employees. Analyzing and visualizing formal and informal relationships in your organization will help to identify patterns of work and communication across the network .

  2. Identify influencers and brokers that connect people: These influencers play a critical role in the process of change as they are early adopters, and will encourage their network to adopt the change as well. When it comes to a cultural shift, post-merger integration, and new technology, the change is only as good as people’s ability to adopt and use it. Network Centrality®’s tools make it easy to identify key influencers and stakeholders to support effective change.

  3. Leverage technology: The right technologies will improve communication and collaboration through social networking. Connecting people in global teams, quickly and efficiently, requires a reliable collaboration tool. Slack and Microsoft Teams are excellent tools for centralizing communication between disparate teams

Case Study

A large multinational pharmaceutical company was undergoing rapid expansion and organizational change in its Middle East operations. They wanted to ensure that their teams were collaborating effectively and coordinating workflow efficiently.

Network Centrality® employed innovative solutions to explore the patterns of communication, collaboration, and trust between individuals and teams. By analyzing and visualizing the formal and informal relationships in the pharmaceutical company, we identified that many departments were performing in solos. There was a lack of communication and collaboration with other departments.

To encourage greater inter-departmental collaboration, we recommended that the department heads meet with each other more frequently to share work updates. The company also encouraged their employees to communicate with other departments more frequently. As a result, the company was very satisfied with the increased team cohesion and more efficient workflows.

Final Thoughts

Successful change management is complex, difficult, and necessary. It requires equal attention to hard factors like project planning, effort, and implementation, while managing soft elements of commitment, trust, integrity, and loyalty. Stakeholders with a high level of informal influence can be key drivers of successful change, and should be identified and placed in the right position to ease adoption and promote innovation.

In-depth analysis of the existing informal networks will help organizations to clearly understand the communication and collaboration patterns between individuals and teams, identifying employees with a high level of influence and informal power. Knowing these networks also helps to visualize knowledge flows across the organization, and locate potential bottlenecks. Incorporating these insights into day-to-day activities will foster innovation, solve problems, and deliver successful and measurable change.

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